Paramount Energy Confirms October 2008 Distribution, Suspends Distribution Reinvestment Plan for October 2008, Updates Hedging and Announces Executive Appointment


    CALGARY, Oct. 17 /CNW/ - Paramount Energy Trust (TSX:PMT.UN) ("PET" or
the "Trust") is pleased to confirm that its distribution to be paid on
November 17, 2008 in respect of income received by PET for the month of
October 2008, for Unitholders of record on October 31, 2008, will be $0.10 per
Trust Unit. The ex-distribution date is October 29, 2008. The October
distribution brings cumulative distributions paid since the inception of the
Trust to $12.924 per Trust Unit. The Trust also announces that there will be
no Trust Units available under its Distribution Reinvestment and Optional
Trust Unit Purchase Plan ("DRIP") for the Trust's October distribution payable
on November 17, 2008 and until further notice. As a result of this suspension,
Unitholders that had elected to participate in the DRIP in the past and were
currently enrolled will now receive cash distributions on the payment date.
Should the Trust elect to reinstate the DRIP, Unitholders that were enrolled
at suspension and remain enrolled at reinstatement will automatically resume
participation in the DRIP. Paramount Energy Trust's distribution policy
remains unchanged.
    Natural gas prices continue to be highly volatile. PET closely monitors
the market drivers with respect to natural gas prices and will continue to
proactively manage the Trust's forward price exposure to meet PET's strategy
of protecting the level of the Trust's monthly distributions and managing the
balance sheet, enhancing or protecting the economics of acquisitions and
capital programs, and capitalizing on perceived market anomalies. Financial
and physical forward sales arrangements, all at the AECO trading hub as at
October 16, 2008 are as follows:

               Volumes         % of          Current
               at AECO        2008E          Forward
    Type of         (2)  Production  Price  Price (4)
     contract    (GJ/d)          (3) ($/GJ)    ($/GJ)           Term
    Financial   73,500                7.68                November 2008 -
                                                                  March 2009
    Physical     2,500                8.37                November 2008 -
                                                                  March 2009
    Period total,
     net (1)    76,000           37   7.71      7.15      November 2008 -
                                                                  March 2009
    Financial   62,500                8.60                  April -
                                                                October 2009
    Period total,
     net (1)    62,500           30   8.60      7.30        April -
                                                                October 2009
    Financial   47,500                9.11                November 2009 -
                                                                  March 2010
    Period total,
     net (1)    47,500           23   9.11      8.37      November 2009 -
                                                                  March 2010
    Financial   37,500                7.58                  April -
                                                                October 2010
    Period total,
     net (1)    37,500           18   7.58      7.60        April -
                                                                October 2010

    (1) Weighted average prices are calculated by netting the volumes of the
        lowest-priced financial and physical sold/bought contracts together
        and measuring the net volume at the weighted average "sold" price for
        the remaining financial and physical contracts. Included in the
        November 2008 - March 2009 volume summary is a collar to sell forward
        5,000 GJ/d at a floor price of $7.00 per GJ at AECO and a ceiling
        price of $8.00 per GJ. The current forward price is used in the
        weighted average price calculation for this collar.
    (2) All transactions at AECO unless identified specifically as a NYMEX
    (3) Calculated using 205 MMcf/d and includes actual and gas over bitumen
        deemed projected production volumes.
    (4) Average AECO forward price for November through December 2008 as at
        Oct ober 17, 2008 is $6.93 per GJ.

    Based on current and forward market natural gas prices, PET's current
monthly distribution level is highly sustainable. Incorporating PET's current
hedging portfolio and forward natural gas prices into the Trust's production,
operations and cash flow forecasts for 2008, the current level of distribution
represents a payout ratio of approximately 58 percent for the remainder of
2008. In addition, at the end of September PET crystallized approximately
thirty percent of its winter 2008-2009 and summer 2009 financial forward sales
position, realizing net proceeds of $11.2 million. Bank debt at year end is
forecast to be less than $280 million drawn on the Trust's current bank credit
capacity of $410 million, which has been reaffirmed through to the next annual
redetermination at April 30, 2009 by the Trust's lenders. PET reviews
distributions on a monthly basis. Future distributions are subject to change
as dictated by changes in commodity price markets, operations and future
business development opportunities. The Trust continues to focus on what we
believe is a sustainable distribution model that balances short term cash
returns to our Unitholders and long term value creation through capital
    PET is also pleased to announce the appointment of Mr. Tim Granger to the
role of Chief Operating Officer and Vice President, Asset Optimization. Mr.
Granger most recently held the office of Managing Director for the Abu Dhabi
National Energy Company's TAQA North Business Unit following their acquisition
of PrimeWest Energy Trust in early 2008. Mr. Granger joined PrimeWest in 1999
and held the role of Chief Operating Officer with overall responsibility for
Development and Production Operations. Mr. Granger has more than 27 years of
extensive experience in exploitation, production operations and asset
management with leading companies including Petro-Canada, Amerada Hess Canada
Ltd., Dynex Petroleum Ltd., Canterra Energy Ltd. and Dome Petroleum Limited.
Mr. Granger holds a P.Eng. (Mechanical) from Carleton University.

    Forward-Looking Information

    Certain information regarding PET in this news release, including
management's assessment of year end bank debt levels, production levels, cash
flows, capital spending plans and payout ratios, may constitute
forward-looking statements under applicable securities laws and necessarily
involve risks including, without limitation, risks associated with gas
exploration, development, exploitation, production, marketing and
transportation, changes to the proposed royalty regime prior to implementation
and thereafter, loss of markets, volatility of commodity prices, currency
fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, inability to retain drilling rigs and other
services, capital expenditure costs, including drilling, completion and
facilities costs, unexpected decline rates in wells, delays in projects and/or
operations resulting from surface conditions, wells not performing as
expected, delays resulting from or inability to obtain required regulatory
approvals and ability to access sufficient capital from internal and external
sources. As a consequence, actual results may differ materially from those
anticipated in the forward-looking statements. Readers are cautioned that the
foregoing list of factors is not exhaustive. Additional information on these
and other factors that could affect PET's operations and financial results are
included in reports on file with Canadian securities regulatory authorities
and may be accessed through the SEDAR website ( and at PET's
website ( Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news release
and PET does not undertake any obligation to update publicly or to revise any
of the forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable securities

    Non-GAAP Measures

    This news release contains financial measures that may not be calculated
in accordance with generally accepted accounting principles in Canada
("GAAP"). Readers are referred to advisories and further discussion on
non-GAAP measures contained in the "Significant Accounting Policies and
non-GAAP Measures" section of management's discussion and analysis.
    PET is a natural gas-focused Canadian energy trust. PET's Trust Units and
convertible debentures are listed on the Toronto Stock Exchange under the
symbol "PMT.UN" and "PMT.DB", "PMT.DB.A", "PMT.DB.B" and "PMT.DB.C",
respectively. Further information with respect to PET can be found at its
website at

    The Toronto Stock Exchange has neither approved nor disapproved the
    information contained herein.

For further information:

For further information: Paramount Energy Trust, Sue Riddell Rose,
President and Chief Executive Officer, (403) 269-4400 or Paramount Energy
Trust, Cam Sebastian, Vice President, Finance and Chief Financial Officer,
(403) 269-4400 or Paramount Energy Trust, Sue Showers, Investor Relations and
Communications Advisor, (403) 269-4400, (403) 269-4444 (FAX) or Paramount
Energy Operating Corp, administrator of Paramount Energy Trust, Suite 3200,
605 - 5 Avenue SW, Calgary, Alberta, T2P 3H5, Email:,

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